2017 may be the year OCWEN was hit with the largest number of individual lawsuits and class actions in the company´s history. Hopefully, it will become the year the subprime mortgage giant lost most of its power over the finances and lives of thousands of Americans. As lawsuits pile up, so do multi-million dollar settlements, ultimately, because the company knows it cannot afford to go to trial.
In this post, OCWEN has just reached a $56 million settlement in an investor lawsuit over stock price drop. The suit´s resolution became public in an OCWEN filing with the U.S. Securities and Exchange Commission. The plaintiffs alleged the company´s problematic mortgage servicing operations had caused the stock to plunge (over 60%) and them to lose money. (We are not sure why anyone would want to purchase OCWEN stock but that is a different post for a different day.)
A few days before the case went to trial, OCWEN and lead plaintiff Sjunde AP-Fonden reached an agreement and jointly filed a motion to settle, which was shortly approved by the Southern District of Florida court. The disclosure was made by OCWEN in a Form 8-K filing.
Perhaps investor complaints are the least of OCWEN´s problems at this point, when it has been bombarded with class actions over its substandard mortgage servicing practices all over the US. Commenting on the settlement, OCWEN sources said the company believes it has “sound legal and factual defenses,” but had agreed to it “to avoid the uncertain outcome of trial and the additional expense and demands on the time of its senior management that a trial would involve.” A statement nobody can take seriously at this point.
Meanwhile, OCWEN prepares to hold a conference call on August 2 to offer the public a review of its 2nd Quarter 2017 operating results, after a delay in these announcements for the dismay of its shareholders. The top market analysts are currently advising shareholders to “Hold” OCWEN shares, several of them downgrading from a previous rating of “Buy.”
The reason OCWEN has not yet thoroughly collapsed in the market is perhaps a series of deals, most recently a deal with New Residential Investment, which has just been signed and sealed after being announced last May.
New Residential´s acquisition of 5% of OCWEN is sadly no good news for the homeowners stuck with OCWEN´s mortgage servicing. In fact, OCWEN is transfering the mortgage servicing rights on $110 billion in unpaid principal balance to New Residential. But New Residential is not planning to service the mortgages, but rather, it will pay OCWEN as much as $400 million to continue servicing those MSRs under a subservicing deal.
This means that although OCWEN is being forced into partial acquisition deals to stay financially afloat as it faces massive lawsuits and settlements, consumers are still suffering from the company´s proven substandard mortgage servicing.
Back in 2014, OCWEN paid $150 million in a settlement with New York´s Dept. of Financial Services over harmful mortgage servicing practices. As more and more cases come to light, it is clear that OCWEN´s vows of compliance following some of these past legal problems were never serious.
Even today, OCWEN continues to do a poor job of servicing mortgages, charging inexplicable fees, and incurring countless violations across the board.
Now, OCWEN has also been named in complaint over disparities in the upkeep of foreclosed homes in Chicago and Indiana. Filed by fair housing organizations, including the Fair Housing Alliance, before the U.S. Department of Housing and Urban Development, the complaint alleges that OCWEN, Deutsche Bank and others are guilty of housing discrimination, because they kept foreclosed homes in majority-white areas in much better shape than homes in majority black, hispanic, and other minority areas.
The filing has introduced evidence that foreclosed homes in non-white areas commonly had unkept lawns, debris, and unsecured doors, while homes in a similar situation in predominantly white areas had well-tended lawns, properly secured doors, and were generally cleaner.
The investigators sent to inspect foreclosures in Chicago and northwest Indiana worked for several years. According to their findings, the poorly maintained properties in lower-income communities hurt neighbors as well, because it diminished their chances of selling and refinancing their own properties due to the general appearance of the foreclosed homes in their areas.
The issue of double standards in foreclosure home maintenance is nothing new. Last year, a federal lawsuit against Fannie Mae, which is now in the discovery stage, made similar claims.
From defrauding investors to lowering the value of property around foreclosed homes, from backdating letters to prompt foreclosures, to fabricating fees, OCWEN has been exposed for every kind of violation under the sun.
Many of OCWEN´s activities are displays of sheer evil. The company has shown no interest in offering a good service or treating homeowners fairly for many, many years. It is thanks to a Consumer Financial Protection Bureau lawsuit filed earlier this year that many of these systematic violations have come to light.
There are thousands of homeowners who have been harmed in numerous ways by OCWEN. In fact, OCWEN employees have also been harmed, with many of them becoming whistleblowers to expose the shabby mortgage servicing giant´s evil ways.
No matter how many conference calls and press releases they put out, how many consumer outreach events they hold, the public now knows what was happening at OCWEN behind closed doors.
OCWEN employees and senior managers themselves have acknowledged that their systems were a total mess, that there were countless ways that their sloppy processing of mortgage services may have harmed massive numbers of US homeowners.
As OCWEN struggles to keep its stock prices above water, one thing it can no longer salvage is its reputation, and that is definitely a good thing for Americans.
Multi-million dollar settlements will continue to pile up. Class actions should prevail, because our experienced team of attorneys can, no doubt, find evidence to substantiate many claims of substandard and harmful practices by OCWEN.
OCWEN Class Action
We have teamed up with other consumer rights lawyers to seek justice for homeowners across the United States. (See our OCWEN fraud and scam investigation page for more details.)
Specifically, we are investigating the following allegations of wrongdoing:
- Use of a proprietary software known to trigger unsupported fees and speed foreclosures (REAL Servicing);
- Knowing use of infirm loan data,
- Illegal foreclosures,
- Failure to credit borrowers’ payments,
- Mismanagement of escrow accounts,
- Manufactured force-placed insurance,
- Delayed termination of private mortgage insurance,
- Charges for additional products without consent,
- Mishandling accounts for deceased borrowers, and
- Failure to correct errors identified by the borrower.
Do any of these tactics sound familiar? If so, we certainly would like to hear from you.
Can we use your story in a blog post? (No names of course!) Let us know that as well. Often by telling these stories other homeowners feel comfortable enough to step forward and share their information.
Looking for OCWEN Whistleblowers
The federal government pays awards to whistleblowers with inside information about fraud involving government programs. Our mortgage company / bank / loan servicer whistleblowers have received over $100 million in awards in recent years. You could be next.
We are always looking to speak with mortgage servicer insiders with information about fraud involving Fannie Mae, Freddie Mac, FHA or VA residential mortgages.
Whether or not you work for Ocwen, if you are a financial services industry insider with information about wrongdoing, call us. All inquiries are kept completely confidential.
NOTE: We do not take individual foreclosure defense cases. On rare occasions we accept an individual wrongful foreclosure case. Presently we are investigating potential fraud class action claims against OCWEN. If you are presently in foreclosure or fighting to keep your home, find a local foreclosure defense lawyer immediately. We also offer some foreclosure defense tips on our sister Lender Liability site.